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Top 10 Reasons Why Outsourcing Software Development to Ukraine Is Beneficial

by Irina Kravchenko

Have you ever paid to have part of your work done by another company? If you have, then you know for sure that this process is called outsourcing. The most obvious benefits of delegating your work are reducing operational costs, increased productivity, improving profit with faster services. Let’s talk about the reason for outsourcing software development Ukraine and figure out why you might find Ukraine to be your perfect hub for technology solutions development.

Reason 1 - Ukraine Holds Over 30 Tech Events Yearly

Ukraine IT Industry Is Globally Attractive

Collaboration with Ukraine developers has proved to yield tangible results. Considering different approaches to calculating, the outsourcing market of Ukraine is estimated at around $3.2 billion. Every year Ukraine brings together hundreds of global tech partners from European countries and North America. For example, M-FORCE is an annual event held in Kyiv and New York for leaders to see the latest trends and disruptions, for investors to explore how they can accelerate ROI, and for startups to meet potential investors.

Ukrainian IT Communities - Outsourcing Software Development

According to Lviv IT Cluster, Ukraine held over 30 large scale tech events like iForum, GDG DevFest Ukraine, Lviv Outsourcing Forum, to name a few. What is important - Ukrainian developers demonstrate a great interest in innovative technologies which leads to the organization of thematic conferences on the blockchain, data science, Big Data, artificial intelligence, etc. The overwhelming desire for professional insights proves that Ukrainian developers want to broaden and improve their skills set.

Reason 2 - Over 125,000 IT Specialists Work Officially in Ukraine

Outsourcing Ukraine Is Considered Effective

According to the latest data, officially there are around 125,000 IT specialists in Ukraine. The larger part of them is based in Kyiv - 29%, Kharkiv - 14%, and Lviv - 10%, and the rest - in other cities of the country.

Many Ukrainian software development companies are included in The 2018 Global Outsourcing 100 list. Those companies were evaluated by their size, customers references, programs for innovation, awards, and corporate social responsibility.

Related article: Diceus is Featured as a Member of Clutch Global Leaders List

Lots of companies are also featured and ranked by trustful website listings like Clutch, IT Firms, Top Agency, and Good Firms. Being on the global lists of IT companies, Ukraine proves to offer demanded software outsourcing services. Let’s take a closer look at what types of services you can get here.

Reason 3 - 6+ Outsourcing Models Are Available in Ukraine

Software Outsourcing Services Are Multi-Optional

To select the right type of outsourcing, you should consider two important things like distance and the preferred type of relationship between you and a provider. According to these parameters, outsourcing is divided into two categories:

Location-based

Onshoring is getting the needed services in your own country. This won’t help you cut costs without compromising quality. However, you could try to find a reliable vendor if you don’t need a large scope of work to be done.

Nearshoring is delegating your part of your tasks or work to the nearby country. You can get cheaper services with the same quality as onshore. The greatest benefit of nearshoring is no or a slight difference in time.

Offshoring is outsourcing to distant countries where the costs of software engineering are much lower than in your country. However, this type of cooperation with an IT software outsourcing company has some peculiarities like cultural and time zone differences.

Customer-provider relationship-based

Staff augmentation is a great way to save money if your project requires some specific skills and knowledge. First off, project managers evaluate the existing staff and then decide which required skills should be outsourced.

Dedicated teams work best for companies where software engineering isn’t a core capability. To build some software, they will need to outsource not only software development services but also project management and delivery.

A dedicated development center is a perfect place to use valuable resources. This type of outsourcing allows for sending your managers to monitor employees in a specific country.

Below is an image demonstrating what type of outsourcing could be best-suited for you.

Outsourcing engagement models

Reason 4 - More Than 150 Universities Teach Computer Science and Information Technology

Ukraine Developers Have Higher Education Degrees

Outsourcing Software Development - Ukrainian Univercities

Over 150 higher educational establishments teach information technology and computer science in Ukraine. 6 universities are on QS Top World University Ranking list. These universities are located in Kyiv, Kharkiv, Sumy, and Donetsk. Due to a great demand for skilled developers and programmers, the Ukrainian educational system has its finger on a pulse to create a lot of opportunities for young talents. Apart from traditional universities, there are many educational centers, free and paid online courses offering different IT programs for study.

Reason 5 - Ukrainian Developers Have Extensive Expertise in Different Industries

Hire Experts with IT Outsourcing Ukraine

Top Ukraine developers are experts in some particular industries, business domains, vertical and horizontal markets. Not only do they code, but they are specialized in healthcare, e-commerce, construction, human resources, banking, and many other industries. The same are business analysts who have both strong analytic skills and software development knowledge.

Industries Expertise - Outsourcing Software Development

Some universities offer specialized computer science programs and courses on innovative concepts and directions in information technology like the Internet of Things (IoT), predictive analytics and Big Data, blockchain technology, and many others. These courses and educational programs are extremely popular both among students and employed developers who want to broaden their technology stack and add valuable knowledge to the set of technical skills.

Reason 6 - Over 85% of Developers Speak English Fluently

English Proficiency of Ukraine Developers is High

What makes Ukraine an attractive outsourcing direction is English proficiency of its developers. Most of them speak English fluently and can understand customers easily. When it comes to interviews or production meetings, foreign clients have no problems with understanding their potential candidates or team members. English is taught at schools and universities. Besides, most employers/software development companies offer free in-house English classes as perks to their employees in order to improve written and spoken English.

As you can see, all these factors, a high level of computer science education, extensive expertise, and long experience in software engineering, facilitate effective cooperation between Ukraine developers and customers from Europe and America. Let’s see how is easy is business cooperation and partnership with Ukrainian outsourcing companies.

Reason 7 - Only in Ukraine You Can Get Your Project Completed in 4 Steps

It’s Easy to Cooperate with an Offshore Software Development Company

Outsourcing is presumed to be the most popular business model when it comes to cooperation with Ukrainian tech companies. However, there is a strong tendency to shifting from that model to technology partnerships. More and more customers search for long-term partnerships with Ukrainian companies as they want to get a comprehensive range of services, from initial business analysis to ongoing technical support and maintenance.

Before starting the software development process, you should discuss with your potential vendor on the details and any other points that may come up during your cooperation. These may include a team composition, technology stack, additional services, and terms and conditions of an outsourcing contract.

Besides, you may also sign a service-level agreement (SLA) and a non-disclosure agreement (NDA). You should specify in advance what results you would like to get. Note, that it’s better to focus on getting the services rather than on outstaffing.

Every offshore software development company has its own procedures and processes followed to provide peak condition and high-quality services in terms of software development. Here is a sample process (followed by our company) for you to understand how it works:

Software outsourcing - process

Reason 8 - Ukrainian Outsourcers Shift to Technology Partnerships

Software Outsourcing vs Technology Partnership

As you can see, Ukraine is a perfect place to outsource your first MVP prototype, startup, web, or mobile development. But what about challenging and complex projects like ERP, CRM, CMS, and other enterprise-level systems which will need more time, efforts, skills, and money? Think of a technology partnership if your project is long-lasting and requires specific technical knowledge and domain expertise.

Reason 9 - 1-7 Hours Is The Difference Between Ukraine and Europe and the USA

Time Zone Difference Between Ukraine and Europe/USA Is Slight

Ukraine is an hour ahead of the majority of European countries. Foreign companies find nearshoring in Ukraine quite comfortable as it ensures fruitful collaboration between an outsourcing development company and a customer. Direct flights from the Ukrainian capital Kyiv to major European cities take around 2 hours.

flight from Ukraine - Outsourcing Software Development
A lot of US companies choose Ukraine as an outsourcing partner as it’s only the 7-hour difference between this country and most states. Direct flights from and to New York are also available at quite affordable costs.

Reason 10 - 100% Guarantee of Code Quality and Performance

Price-Performance Ratio Is Appropriate

Compared to its neighbors, Ukrainian developers offer more reasonable outsourcing rates. The average hourly rate is around $25–50 whereas Western European developers offer much higher costs. Besides, the latest changes in licensing have significantly enhanced the way of running business in Ukraine.

Major Risks: How to Outsource Software Development Without Compromising Quality

If your project scope is huge and your risks are high, you should know how to avoid choosing the wrong partner. Let’s talk about how to outsource software development with minimal risks and possible project failures.

To eliminate outsourcing risks, you should discuss all the details with your potential vendor. As I mentioned, you should sign an outsourcing contract along with SLA and NDA. These documents if double checked will ensure that you get that level of services you require. However, there’re a lot of simple tips not to be deceived by development companies and obtain the desired results.

First off, let’s define the most popular cheating practices used by unfair software service providers and vendors all over the world.

Risks of outsourcing software development

5 Useful Tips for Choosing a Reliable Technology Partner

As you can see, among the main risks of outsourcing, there are a lot of factors that can cause project failure. Thus, it’s crucial to be careful when choosing a partner for software development. I’ve got some helpful tips for you.

Tip 1. While selecting an outsourcing company, read customer reviews about the potential vendors. In such a way, you can learn about their focus industry expertise, experience, and the technology stack. It is likewise useful to find some feedback from clients who’ve already obtained the software engineering services from the vendor of your choosing.

Tip 2. Say, you made up your mind on a particular company. Now it’s high time to get acquainted with all the team members who are to work on your project tasks. You can do this through face-to-face meetings at the company’s office or online.

A personal meeting will help you eliminate a possible replacement of one team member for another, with a lower level of experience. For example, you are told that a senior .NET developer will work for you. However, as soon as the project starts, the senior is replaced with the middle or, worse still, with a junior or entry-level developer.

Tip 3. To study the experience and expertise of your team members more thoroughly, follow them on social and professional networks like Facebook, Twitter, or LinkedIn. There you will be able to read more about your employees including their education, skills and competencies, certification, and other valuable information.

Tip 4. Use specialized time-tracking or project management applications to monitor the project progress. Usually, software companies offer such tools as a part of the agile process.

Tip 5. Look for an independent auditor to check the code clarity and performance, evaluate the correctness of the accomplished tasks, and do another auditing if needed.

How Much Does It Cost to Hire a Software Developer for Outsourcing? Engagement Models

Quality, time, and money are probably the most crucial determinants in outsourcing decisions. Who has an interest not to obtain excellent quality and fast time to market at low costs?

How much will it cost to develop a project from scratch? That’s for sure one of the most frequent questions asked by customers. To learn “how much does it cost to hire a software developer for outsourcing”, you’ll need to sort out the details of engagement models for outsourcing.

Engagement models define the nature of collaboration between an outsourcing company and a customer. You’ve already read above about location-based and customer-provider relationship-based types of outsourcing. Let’s now focus on pricing models.

Time & Material

According to the conditions of this model, you pay for the actual outcomes of the project. The project is divided into milestones each being evaluated separately. The project team estimates the complexity of the first task and shows you how many man hours they need to complete the task. Then this number is multiplied by the rates. Finally, you are told a total cost for that very task. If you agree, the team starts doing the task.

Key features:

  • Flexibility
  • Opportunity to start the project at once
  • Transparent developer’s rates
  • Ability to track and monitor tasks, time, and budget
  • Ability to track the progress on any stage of the project

Best suited for large companies and enterprises having no precise requirements for the project.

Fixed price

Before developing a project, its budget and is defined. It remains unchanged. Delivery time is also defined in advance. An outsourcing provider is responsible for the on time delivery which can seem advantageous for the customer. However, oftentimes, to complete the project on time, software development teams sacrifice quality for deadlines.

Key features:

  • Fixed time
  • Fixed budget
  • Fixed scope
  • Inability to make change requests or ask for any add-ons once the contract is signed.
  • Higher development rates
  • Possible quality compromises

Best suited for small projects having a limited set of functionalities.

Outcome-based engagement model

means that a customer pays for the outcomes of the project. i.e. when he obtain the desired results, functionalities, features, etc. The software development provider is fully responsible for managing his resources and capabilities to achieve the required level of quality. Customer control is limited.

Key features:

  • SLA agreement to define the level of service quality, price, deliverables, etc.
  • Lack of control from the customer’s side
  • Business-relevant outcomes
  • Guaranteed service level
  • Optimized resource planning

Best suited for long-term projects having lots of business challenges, for large enterprises and technology partners to build complex enterprise-level systems.

How Much Does It Cost to Hire a Software Developer for Outsourcing in Ukraine?

As of Fenruary 2019, the average yearly pay of a software engineer in the United States is $80K which is around $6,600 per month. A median salary for Ukraine developers equals to $25K yearly which is around $2,000 per month. According to this data, $4,600 is a pay difference between a software developer from Ukraine and their counterparts from the United States. The difference becomes more vivid when it comes to developing long-term projects. It affects greatly the client's decision to outsource projects to Ukraine.

The best way to learn how much it will cost you to build a project from scratch or develop some functionalities to the existing software solution is to contact an offshore software development company directly. You will need to tell them about your initial requirements to the product, discuss all the major points like budget, timeline, preferred engagement model, and many others.

Based on the provided information, business analysts or project managers will define the main input data for the project estimation. If you’re a beginner to information technology or a customer having no idea what estimation is, here’s some useful information for you.

Project estimation is a quantitative evaluation of costs, duration, and resources needed to complete the project. Usually, project managers create an estimate in 8-10 basic steps, which are as follows:

  1. Collect data on initial requirements and specifications provided by a customer.
  2. Define the skills and resources needed to create a product.
  3. Identify if there are suitable team members with relevant experience and expertise.
  4. Determine the number of hours or man hours needed to develop a project or its part.
  5. Estimate the cost for hours.
  6. Consider the cost of managed services and other additional support.
  7. Identify all possible risks.
  8. Review the estimate.

It’s important to provide as much information about the desired product as possible. You can include all the functionalities, features, and options you would like to see in the software solution to be developed. This information will significantly help project managers and developers to accurately estimate the project costs.

Final Words

To sum it up, I must admit that Ukraine is currently one of the most attractive tech hubs in the world for outsourcing IT services. Apart from delegating your tasks to freelance developers or individual entrepreneurs, you can find here a lot of professional companies providing the entirety of services for different industries and business domains.

You’ll surely benefit from paying lower costs for software development and managed services, getting access to a huge talent pool, and obtaining the desired project outcomes on time. Ukraine developers are responsible and reliable, speak English fluently, and are easy to communicate.

Ukraine is easy to reach from any part of the globe. Most Ukrainian software companies invite their customers for production meetings, negotiations, and other professional events and occasions. However, if you have no possibility to come, that’s not a problem. You can schedule online meetings with your team members in advance. Agile development companies hold regular scrum meetings and if you wish, you can be present during the meeting.

If you are just on your start line to outsourcing, remember that you must be careful not to be caught by scams or deceived by unfair outsourcing providers. Revise the tips I mentioned not to be deceived by your development vendor.

I hope that this article is helpful for you, yet, if you have any questions about outsourcing to Ukraine, feel free to ask our experts. They are able to assist you in the software outsourcing process by consulting you on the best ways to collaborate with software engineers.

We have a long and extensive experience in delivering a comprehensive set of ICT services to customers from over 20 countries of the world. Drop us a line if you need ERP, CRM, ECM, or other complex systems for healthcare, construction, e-commerce, banking, etc.

 

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